In an attempt to encourage clean energy in the country, the State Bank of Pakistan (SBP) has enhanced the scope of its Refinance Scheme for Renewable Energy, according to a statement issued on Wednesday.
The scheme allows financing under category III to solar and wind-based energy sale companies. After feedback received from stakeholders, the size of the project established by the vendor, supplier, or energy sale company has been increased from 1MW to 5MW. The cumulative financing limit has also been increased from Rs1 billion to Rs2 billion.
“This revision in the scheme is expected to not only attract fresh local and foreign investment in the sector but also facilitate production of clean energy in the country, helping in managing climate change,” the SBP said.
The SBP Financing Scheme for Renewable Energy was announced in June 2016, with an aim to help address the challenges of energy shortages and climate change in the country.
Initially, the scheme had two categories. Category 1 allowed financing for setting up of renewable energy power projects, with the capacity ranging from 1MW to 50MW for own use or selling of electricity to the national grid, or combination of both.
Category II allowed financing to domestic, agriculture, commercial and industrial borrowers to install renewable energy-based projects of up to 1MW to generate electricity for own use or selling to the grid and distribution company under net metering.
Later, in July 2019, the SBP introduced Category III for facilitating financing to vendors and suppliers to install wind and solar systems of up to 1MW. The SBP also launched a Shariah-compliant version of the scheme in August 2019.
Since the introduction of the scheme, total outstanding financing under the scheme has reached Rs15.6 billion for 217 projects. This has the potential of adding 292MW to energy supply.